Next Science Ltd - A Unique Treatment Combating Resistant Bacteria

Business model

Next Science aims to expand its XBIO technology range of products for treatment of biofilm- based infections, which account for more than 80% of microbial infections. The company outsources product manufacturing under agreements with accredited third-party manufacturers. Revenues are generated through the offering of products to market via distribution partnerships with Zimmer Biomet and TELA Bio. These partners have exclusive rights to the white-labelled version of the products which they are distribute and market to health-care professionals. XPERIENCE is distributed directly by Next Science and through the white-label versions by Zimmer and TELA. Next Science’s acne products are distributed through AST and tbh Skincare within Australia.

Record CY21 growth thanks to FDA approval

In CY2021 Next Science launched new products, was granted new approvals, and developed new distribution partnerships. As a result, the company generated FY21 revenues growth of 160% on prior year to deliver revenues of US$8.95m. FY20 revenues (US$3.4m) were impacted by COVID lockdowns which saw clinics close and elective surgeries postponed. Revenues growth is largely due to the successful launch of XPERIENCE, which is gaining traction in the US with 160 surgeons utilising the product across 93 hospitals by the end of CY2021. Gross profit for CY2021 was US$6.9m, up from US$2.9m in CY2020, but the gross profit margin was 78%, compared with 85% in CY2020 due to a change in revenue composition. The net loss for the year was US$9.9m, an improvement on the US$11.9m loss reported in CY2020.

Technology plays to its advantage

Next Science operates in a highly competitive market, however, is the only company with a technology that has no known bacteria resistance when treating biofilm. Competitors are those which operate within the drug manufacturing industry including companies producing antibiotic and antibacterial products. These include Nanosonics (ASX:NAN), which develops digital technology to fight against the spread of healthcare-associated infections; and Maynepharma (ASX:MYX), which competes with Next Science in treatment of antibiotics and acne medication and has a market cap of $494.15m and a large established product range.